Prospecting for Peak Performance TIPS FOR EFFECTIVELY RESEARCHING AND MANAGING PROSPECTIVE MAJOR DONORS

Speakers Adam Martel

CEO & Co-Founder, Gravyty

adam@gravyty.com

Ian T. Wells

President, Ian T. Wells & Associates

ian@iantwells.com

Obstacles Hindering Performance Limited budgets

Insufficient time and/or staff to fulfill expectations

A need to keep expenses low relative to revenue

A high rate of turnover in a relationship-based industry

A lack of affluent donors to support important programs and initiatives

Insufficient technology

Prospect Development: A Solution for Growth

Enhanced prospect development

processes

More high-quality prospects

Greater number of successful

solicitations Increased revenue

Additional funds to invest in research &

management

Prospect Development provides the most viable solution for overcoming obstacles to growth

Studies have proven that strong prospect development processes are key components of a successful fundraising initiative Three out of four organizations that consistently

use prospect identification systems regularly reach their major gift goals*

Only 39% of organizations that inconsistently identify prospects regularly reach their MG goals*

Prospect Development offers a return on investment that can often be measured by orders of magnitude

* The Chronicle of Philanthropy, Sept. 12, 2017

Prospects: The Heart of the Game Prospects are as essential to the development industry as petroleum is to the automobile industry “If you don’t have any, you won’t get very far.”

Yet, some nonprofit organizations view prospect development as an unnecessary expense or as a luxury service reserved for larger institutions

Rather than view prospecting as an optional endeavor, it is crucial for advancement offices to recognize it as a fundamental prerequisite for success

Data Mining If your organization has quality information that has been consistently managed in your database, a data scientist can help you to find giving patterns in your constituent base that will help you to identify underutilized prospects

Even if your office has inconsistent or non-existent data management standards, a review of your constituent base – conducted via an electronic screening, manual research, or a combination of both techniques – is likely to help you find wealth indicators on constituents that were not previously known to be wealthy

NONE OF THIS MATTERS IF FUNDRAISERS DON’T TAKE ACTION ON WHAT THE DATA TELLS THEM!

Prospect Discovery In addition to leveraging the untapped potential of your database, it is also important to search for potential donors that have yet to establish a strong record of charitable support for your organization

Prospecting strategies include: Conducting due-diligence on first-time donors to your

charity

Finding and evaluating donors to similar organizations

Relationship mapping the affiliations of trustees, overseers, directors, and/or prominent volunteers

Researching new RSVPs prior to a large cultivation event

Monitoring professional/life changes for constituents who did not previously satisfy the criteria for major gift donors

Refinement: From Prospects to Donors Research should be scaled relative to a prospect’s proximity to making a major gift Previously-unrated constituents a capacity rating and brief comment

Prospects recommended for assignment a paragraph summarizing professional details, philanthropy, capacity, and connection to the institution

Qualification/Cultivation stage prospects At least a page providing details on career history, known assets, and aforementioned information; additional questions should be explored at the request of the gift officer

Solicitation stage prospects Multi-page documents reporting every relevant detail that can be confirmed, including family background, board affiliations, an exhaustive evaluation of assets and wealth indicators, and documentation of every confirmed charitable gift to date

Bear in mind that affluent prospects who are philanthropic are very likely to be engaged by other nonprofit organizations; particularly insightful research can help make the difference between being one of many charities supported by the prospect vs. becoming the prospect’s favorite charity

Projecting Long-Term Needs

Major Gift

Levels

Gifts

Needed

Major Gift

Revenue

# That Need to be Solicited

(If 25% Give Major Gifts)

# That Need to be Identified

(If 50% of Identified get Solicited)

$50,000,000 1 $50,000,000 4 8

$25,000,000 2 $50,000,000 8 16

$10,000,000 4 $40,000,000 16 32

$5,000,000 8 $40,000,000 32 64

$1,000,000 16 $16,000,000 64 128

$500,000 32 $16,000,000 128 256

$250,000 64 $16,000,000 256 512

$100,000 120 $12,000,000 480 960

Totals: 247 $240,000,000 988 1,976

(Parameters may be established by Executive Leadership.) (Projections can be calculated by Prospect Research.)

Other Concerns to Evaluate Is the rate of prospect identification sufficient to find the requisite number of prospects at least 18 – 24 months ahead of goal?

Are qualified prospects moving through the solicitation cycle, on average, within an 18 – 24 month timeframe?

Do gift officers have the information they need to conduct effective cultivation efforts with their prospects?

Does the pipeline ensure that gift officers’ portfolios will be robust enough to meet their individual and collaborative goals?

More Prospects Prevents Donor Burnout 42% of high net worth donors cite being asked for too much or being asked too often as the reason they stopped providing philanthropic support to a nonprofit organization*

Prospecting provides a solution to this problem by giving frontline fundraisers a vast population of potential donors, thus mitigating the need to rely heavily on a few committed donors

*The Fundraising Resource Group, “The 7 Deadly Sins of Capital Campaigns”

Ask a prospect for money.

She gave! Ask again!

It’s been 5 months; time to ask again!

We’re low on good prospects.

Squeeze more out of that donor!

Act surprised when the former donor

has been alienated.

Standard Operating Procedure

Investing in Prospect Identification Electronic screenings cost roughly $0.25/constituent (cost varies per provider)

Proactive research should be treated as a high priority, rather than an ancillary duty Reserving recurring blocks of time for prospect

identification can help increase your organization’s rate of prospect discovery

Organizations that cannot afford hiring full time prospect researchers can outsource targeted research efforts to professional contractors

Bear in mind research’s ROI: a single major gift from a newly-identified prospect can pay for the expense of finding hundreds or even thousands of other MG prospects Your most limited resource isn’t money; it’s time

Aligning Activities with Goals

0

100

200

300

400

500

600

700

800

Charitable GivingElsewhere

DataAnalytics/Predictive

Models

Event Attendees New Constituents Relationship Mapping Screening + Vetting

97 85

520

728

162

561

25

62

18

98

41

153

Prospect Identification Results

# Identified # Made MG Gift

What’s the problem?

Identified/ Rated Prospects

Properly Cultivated to Solicitation

Padding unmanageable

portfolios

Never visited by the Frontline

Not engaged due to insufficient data

Prospect (Mis)management

Enhanced Portfolio Management Strong portfolio management protocols prevent good prospects from being underutilized or completely “falling through the cracks”

Elements of portfolio management include: Reviewing the prospects assigned to portfolios to

ensure that they are moving forward through the solicitation cycle

Establishing an accurate assessment for the number of prospects that should be assigned to a portfolio, and either expanding or limiting portfolios accordingly

Flagging “stalled” prospects for further discussion and possible analysis

Prospect Management Protocols

No action in over a year?

Research Reassign Reject

Portfolio Review Report (Basic)

Minor Changes Yield Major Improvements

A 5% improvement in the successful solicitation rate can yield a 20% improvement in revenue

Capacity Level # of Prospects Solicited Revenue if 20% Give at

Capacity Revenue if 25% Give at

Capacity

$5,000,000+ 6 $5,000,000 $5,000,000

$1,000,000 - $4,999,999 13 $2,000,000 $3,000,000

$500,000 - $999,999 38 $3,500,000 $4,500,000

$250,000 - $499,999 75 $3,750,000 $4,500,000

$100,000 - $249,999 127 $2,500,000 $3,100,000

Total: $16,750,000 $20,100,000

Using Data to Support and Prioritize Research

Descriptive Analytics

Predictive Analytics

Prescriptive Analytics

Platforms

Dashboard

What’s next????

THE A.I. Enabled Nonprofit

What does an A.I. Enabled Research Office Look Like?

Proactive vs reactive research

Robo-Manage Rated but unassigned donors

Create portfolios on the fly

Match top donors with most appropriate fundraiser

Quicker onboarding for new fundraisers

Democratize fundraising function

CHANGE IS COMING- WILL YOU ADAPT?